Governor Bruce Rauner recently signed into law amendments to the Illinois Limited Liability Company Act (the “Act”) altering certain organizational and annual compliance fees charged by the Illinois Secretary of State. The amendments became effective on December 20, 2017. The most significant of these amendments reduces filing fees for articles of organization from $500 to $150 and the filing fee of the annual report from $250 to $75.
Following its introduction in 1994, the limited liability company (“LLC”) has tended to be the vehicle of choice for Illinois businesses and entrepreneurs. With the exception of highly regulated enterprises, this popularity is primarily attributable to the fact that it combines the limited liability of a corporation with pass-through tax treatment of a partnership. Additionally, management structures are more flexible with members enjoying considerable freedom to write their own protocols for management.
Other recent amendments to the Act were designed to further align the Act with the Revised Uniform Limited Liability Company Act as adopted by numerous other states. Pursuant to these amendments, (1) members are not automatically agents of the LLC solely by reason of being a member; (2) oral and implied operating agreements are now recognized; (3) the LLC is automatically bound by the agreement, even if not expressly consented to in such agreement; (4) the LLC is presumed member-managed unless otherwise expressly stated in the operating agreement; (5) a person may become a member without acquiring an economic interest; (6) the operating agreement may eliminate or reduce a member’s fiduciary duties by clear and unambiguous language; (7) a withdrawn member’s rights to inspect LLC records is specified; (8) rights of a member’s judgment creditors are limited; (9) courts are granted authority to resolve disputes other than by dissolution; (10) an LLC is no longer required to purchase interests held by a withdrawn member; (11) the Act expanded rights permitting LLC conversion and domestication; (12) dissolution documentation is identified; and (13) the Act has greater recognition of electronic records.
The amendments include a number of other reductions in compliance costs and filing fees. A copy of the new legislation concerning regulatory fees is available here. The full text of the earlier changes to the Act is available here.
If you have any questions about changes to your Illinois LLC, or need assistance with these amendments, please contact your Lashly & Baer, P.C. attorney. Click Here to learn more about our Business and Corporate Practice Group.
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